CINCINNATI--(BUSINESS WIRE)--
The Procter & Gamble Company (NYSE:PG) reported third quarter fiscal
year 2014 core earnings per share of $1.04, an increase of five percent
versus the prior year. On a currency-neutral basis, core earnings per
share increased 17 percent for the quarter. Diluted net earnings per
share were $0.90, an increase of two percent. P&G delivered organic
sales growth of three percent for the quarter. Net sales were $20.6
billion, unchanged versus the prior year period, including a negative
three percentage point impact from foreign exchange.

“P&G’s third quarter results came in as we had expected. This leaves us
on track to deliver our top- and bottom-line growth objectives for the
fiscal year,” said Chairman, President, and Chief Executive Officer A.G.
Lafley. “We’re operating in a slow-growth, highly competitive
environment, which places even greater importance on strong innovation
and productivity improvement. We’re delivering meaningful product
innovations that are attracting more consumers to our brands. We’re
making good progress on our productivity plans, with cost savings and
enrollment reductions ahead of going-in targets for the year. We’re
confident that the cumulative benefits from these innovations and
productivity improvements will lead, over time, to improved value
creation for consumers, customers and shareholders.”

January – March Quarter Discussion

All-in net sales were unchanged versus the prior year at $20.6 billion
in the January – March quarter, including a negative three percentage
point impact from foreign exchange. Organic sales grew three percent.
Organic sales were at or above year ago levels in each reporting
segment. Volume grew three percent. Pricing increased sales by one
percent with higher pricing in each reporting segment, and unfavorable
geographic and product mix decreased sales by one percent.

Foreign

Net

Organic

Organic

Volume

Exchange

Price

Mix

Sales

Volume

Sales

Beauty

0%

-3%

1%

0%

-2%

1%

2%

Grooming

2%

-5%

3%

-4%

-4%

2%

1%

Health Care

2%

-2%

1%

-3%

-2%

2%

0%

Fabric Care and Home Care

6%

-4%

1%

-1%

2%

6%

6%

Baby, Feminine and Family Care

0%

-4%

2%

0%

-2%

0%

2%

Total P&G

3%

-3%

1%

-1%

0%

3%

3%

Beauty segment organic sales increased two percent from innovation in
Hair Care, Deodorants, and Personal Cleansing, and market growth. This
was partially offset by a sales decrease in Salon Professional and
Skin Care primarily in Asia.

Grooming segment organic sales increased one percent due to higher
pricing and innovation on Blades & Razors and Appliances, which was
partially offset by geographic and product mix and market contraction
in developed regions.

Health Care segment organic sales were unchanged. Growth in Oral Care
sales from innovation, geographic market expansion and market growth
was offset by decreases in Personal Health Care due to lower cold and
flu incidents and in Pet Care primarily behind the continuing impacts
from product recalls in the previous fiscal year.

Fabric Care and Home Care segment organic sales increased six percent
with growth across each business. Fabric Care was up behind new
innovation, developing market growth, higher pricing and initial
innovation shipments. Home Care and Personal Power sales grew behind
innovation and market expansion in developing regions, and Personal
Power and Professional increased sales due to distribution expansion.

Baby, Feminine and Family Care segment organic sales increased two
percent. Baby Care sales were up behind product innovation and market
growth in the developing regions. Feminine Care sales grew due to
developing market growth and value interventions in North America.
Family Care sales declined due to competitive promotional activity.

Core earnings per share, which exclude non-core restructuring charges
and balance sheet revaluation charges resulting from foreign exchange
policy changes in Venezuela, were $1.04, an increase of five percent
versus the prior year. The core effective tax rate decreased 250 basis
points versus the prior year, providing a $0.03 earnings per share
benefit. Other foreign exchange impacts reduced earnings by $0.12 per
share. Core earnings per share were up 17 percent on a currency-neutral
basis. Diluted net earnings per share were $0.90, an increase of two
percent versus the prior year.

Operating cash flow was $4.1 billion for the third quarter. The Company
repurchased $1.5 billion of common stock and returned $1.7 billion of
cash to shareholders as dividends. Earlier this month, the Company
announced an increase to the quarterly dividend of seven percent. P&G
has been paying a dividend for 124 consecutive years since its
incorporation in 1890. This is the 58th consecutive year that the
Company has increased its dividend.

Fiscal Year 2014 Guidance

The Company continues to expect organic sales growth of three percent to
four percent. All-in sales growth is expected to be approximately one
percent, including a negative foreign exchange impact of two to three
percent. Core earnings per share are expected to grow three percent to
five percent for the fiscal year, and reported earnings per share are
expected to grow in the range of one percent to four percent.

Pet Care Divestiture

As announced earlier this month, Mars Inc. has agreed to buy a
significant portion of P&G’s global Pet Care business. The transaction
is expected to be completed in the second half of calendar 2014, subject
to regulatory approvals. P&G said that it intends to sell the remaining
portion of its Pet Care business in a separate transaction.

As a result of P&G’s decision to exit the Pet Care business, the Company
said that it will begin reporting results of the global Pet Care
business as discontinued operations effective with the April-June 2014
quarter. Historical quarterly and fiscal year results will be restated
on the same basis. Following is a table that shows the expected impact
to quarterly Core EPS results from this change for the Pet Care business.

Certain statements in this release or presentation, other than purely
historical information, including estimates, projections, statements
relating to our business plans, objectives, and expected operating
results, and the assumptions upon which those statements are based, are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933, and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements generally are identified by the words
“believe,” “project,” “anticipate,” “estimate,” “intend,” “strategy,”
“future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will
be,” “will continue,” “will likely result,” and similar expressions.
Forward-looking statements are based on current expectation and
assumptions that are subject to risks and uncertainties which may cause
results to differ materially from the forward-looking statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether because of new information, future events or
otherwise.

Risks and uncertainties to which our forward-looking statements are
subject include: (1) the ability to achieve business plans, including
growing existing sales and volume profitably and maintaining and
improving margins and market share, despite high levels of competitive
activity, an increasingly volatile economic environment, lower than
expected market growth rates, especially with respect to the product
categories and geographical markets (including developing markets) in
which the Company has chosen to focus, and/or increasing competition
from mid- and lower tier value products in both developed and developing
markets; (2) the ability to successfully manage ongoing acquisition,
divestiture and joint venture activities to achieve the cost and growth
synergies in accordance with the stated goals of these transactions
without impacting the delivery of base business objectives; (3) the
ability to successfully manage ongoing organizational changes and
achieve productivity improvements designed to support our growth
strategies, while successfully identifying, developing and retaining
particularly key employees, especially in key growth markets where the
availability of skilled or experienced employees may be limited; (4) the
ability to manage and maintain key customer relationships; (5) the
ability to maintain key manufacturing and supply sources (including sole
supplier and plant manufacturing sources); (6) the ability to
successfully manage regulatory, tax and legal requirements and matters
(including, but not limited to, product liability, patent, intellectual
property, price controls, import restrictions, environmental and tax
policy) and to resolve pending matters within current estimates; (7) the
ability to resolve the pending competition law inquiries in Europe
within current estimates; (8) the ability to successfully implement,
achieve and sustain cost improvement plans and efficiencies in
manufacturing and overhead areas, including the Company's outsourcing
projects; (9) the ability to successfully manage volatility in foreign
exchange rates, as well as our debt and currency exposure (especially in
certain countries with currency exchange, import authorization or
pricing controls, such as Venezuela, Argentina, China, India and Egypt);
(10) the ability to maintain our current credit rating and to manage
fluctuations in interest rate, increases in pension and healthcare
expense, and any significant credit or liquidity issues; (11) the
ability to manage continued global political and/or economic uncertainty
and disruptions, especially in the Company's significant geographical
markets, due to a wide variety of factors, including but not limited to,
terrorist and other hostile activities, natural disasters and/or
disruptions to credit markets, resulting from a global, regional or
national credit crisis; (12) the ability to successfully manage
competitive factors, including prices, promotional incentives and trade
terms for products; (13) the ability to obtain patents and respond to
technological advances attained by competitors and patents granted to
competitors; (14) the ability to successfully manage increases in the
prices of commodities, raw materials and energy, including the ability
to offset these increases through pricing actions; (15) the ability to
develop effective sales, advertising and marketing programs; (16) the
ability to stay on the leading edge of innovation, maintain the positive
reputation of our brands and ensure trademark protection; and (17) the
ability to rely on and maintain key information technology systems and
networks (including Company and third-party systems and networks), the
security over such systems and networks, and the data contained therein.
For additional information concerning factors that could cause actual
results to materially differ from those projected herein, please refer
to our most recent 10-K, 10-Q and 8-K reports.

About Procter & Gamble

P&G serves approximately 4.8 billion people around the world with its
brands. The Company has one of the strongest portfolios of trusted,
quality, leadership brands, including Always®, Ambi Pur®, Ariel®,
Bounty®, Charmin®, Crest®, Dawn®, Downy®, Duracell®, Fairy®, Febreze®,
Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®,
Pantene®, SK-II®, Tide®, Vicks®, Wella® and Whisper®. The P&G community
includes operations in approximately 70 countries worldwide. Please
visit http://www.pg.com for
the latest news and in-depth information about P&G and its brands.

The Procter & Gamble Company

Exhibit 1: Non-GAAP Measures

In accordance with the SEC’s Regulation G, the following provides
definitions of the non-GAAP measures used in the earnings release and
the reconciliation to the most closely related GAAP measure.

Organic Sales Growth: Organic sales growth
is a non-GAAP measure of sales growth excluding the impacts of
acquisitions, divestitures and foreign exchange from year-over-year
comparisons. We believe this provides investors with a more complete
understanding of underlying sales trends by providing sales growth on a
consistent basis. Organic sales growth is also one of the measures used
to evaluate senior management and is a factor in determining their
at-risk compensation.

The reconciliation of reported sales growth to organic sales growth is
as follows:

January – March (JFM) 2014

Net

Foreign

Acquisition/

Organic

Sales

Exchange

Divestiture

Sales

Growth

Impact

Impact*

Growth

Beauty

-2%

3%

1%

2%

Grooming

-4%

5%

0%

1%

Health Care

-2%

2%

0%

0%

Fabric Care and Home Care

2%

4%

0%

6%

Baby, Feminine and Family Care

-2%

4%

0%

2%

Total P&G

0%

3%

0%

3%

Net

Foreign

Acquisition/

Organic

Sales

Exchange

Divestiture

Sales

Total P&G

Growth

Impact

Impact*

Growth

FY 2014 (Estimate)

1%

2% to 3%

0%

3% to 4%

*Acquisition/Divestiture Impact includes volume and mix impacts of
acquired and divested businesses, as well as rounding impacts necessary
to reconcile net sales to organic sales.

Core EPS: This is a measure of the
Company’s diluted net earnings per share excluding charges in FYs 2014
and 2013 for incremental restructuring due to increased focus on
productivity and cost savings, and charges in FYs 2014 and 2013 for the
balance sheet impacts from the devaluation of the foreign currency
exchange rate in Venezuela, charges in FY 2013 related to European legal
matters, holding gain in FY 2013 on the buyout of our Iberian joint
venture (JV), and impairment charges in FY 2013 for goodwill and
indefinite lived intangible assets. We do not view these items to be
part of our sustainable results. We believe the Core EPS measure
provides an important perspective of underlying business trends and
results and provides a more comparable measure of year-on-year earnings
per share growth. Core EPS is also one of the measures used to evaluate
senior management and is a factor in determining their at-risk
compensation. The table below provides a reconciliation of diluted net
earnings per share to Core EPS:

JFM 14

JFM 13

Diluted Net Earnings Per Share

$0.90

$0.88

Venezuela balance sheet (b/s) devaluation impacts

$0.10

$0.08

Incremental restructuring

$0.04

$0.03

Core EPS

$1.04

$0.99

Core EPS Growth

5%

JAS

OND

AMJ

JAS

OND

12

12

13

13

13

FY 13

Diluted Net Earnings Per Share

$0.96

$1.39

$0.64

$1.04

$1.18

$3.86

Gain on buyout of Iberian JV

-

($0.21)

-

-

-

($0.21)

Incremental restructuring

$0.09

$0.05

$0.02

$0.02

$0.03

$0.18

Charges for European legal matters

$0.01

-

$0.04

-

-

$0.05

Impairment charges

-

-

$0.10

-

-

$0.10

Venezuela b/s devaluation impacts

-

-

-

-

-

$0.08

Rounding impacts

-

($0.01)

($0.01)

($0.01)

-

($0.01)

Core EPS

$1.06

$1.22

$0.79

$1.05

$1.21

$4.05

Note – All reconciling items are presented net of tax. Tax effects are
calculated consistent with the nature of the underlying transaction.

Currency-neutral Core EPS: This is a
measure of the Company’s Core EPS growth excluding the impact of foreign
exchange. We believe the currency-neutral Core EPS measure provides a
more comparable view of year-on-year earnings per share growth.

JFM 14

Diluted Net Earnings Per Share Increase

2%

Venezuela balance sheet devaluation impacts of $0.02

2%

Incremental restructuring of $0.01

1%

Core EPS Growth

5%

Other foreign exchange impact of $0.12

12%

Currency-neutral Core EPS Growth

17%

Note – All reconciling items are presented net of tax. Tax effects are
calculated consistent with the nature of the underlying transaction.

Core Operating Profit Margin: This is a
measure of the Company’s Operating Margin adjusted for the current and
prior year charges related to incremental restructuring due to increased
focus on productivity and cost savings and the current and prior year
charges for the balance sheet impacts from the devaluation of the
foreign currency exchange rate in Venezuela:

JFM 14

JFM 13

Operating Profit Margin

16.8%

16.5%

Incremental restructuring

0.7%

0.6%

Venezuela balance sheet devaluation impacts

1.4%

1.7%

Rounding impacts

0.1%

-

Core Operating Profit Margin

19.0%

18.8%

Basis point change

20

Core Gross Margin: This is a measure of the
Company’s Gross Margin adjusted for the current and prior year charges
related to incremental restructuring due to increased focus on
productivity and cost savings:

JFM 14

JFM 13

Gross Margin

48.4%

49.8%

Incremental restructuring

0.4%

0.2%

Rounding impacts

0.1%

-

Core Gross Margin

48.9%

50.0%

Basis point change

-110

Core Selling, General and Administration Expense
(SG&A) as a percentage of sales: This is a measure of the
Company’s SG&A as a percentage of sales adjusted for the current and
prior year charges related to incremental restructuring due to increased
focus on productivity and cost savings and the current and prior year
charges for the balance sheet impacts from the devaluation of the
foreign currency exchange rate in Venezuela:

JFM 14

JFM 13

SG&A as a percentage of sales

31.6%

33.3%

Incremental restructuring

(0.3%)

(0.3%)

Venezuela balance sheet devaluation impacts

(1.4%)

(1.7%)

Rounding impacts

-

(0.1%)

Core SG&A as a percentage of sales

29.9%

31.2%

Basis point change

-130

Core Effective Tax Rate: This is a measure
of the Company’s effective tax rate adjusted for current and prior year
charges for incremental restructuring and the current and prior year
charges for the balance sheet impacts from the devaluation of the
foreign currency exchange rate in Venezuela. The table below provides a
reconciliation of the effective tax rate to the Core effective tax rate:

JFM 14

JFM 13

Effective Tax Rate

20.8%

21.2%

Tax impact of incremental restructuring

(0.1%)

(0.1%)

Tax impact of Venezuela devaluation impacts

(1.1%)

1.1%

Rounding

0.1%

-

Core Effective Tax Rate

19.7%

22.2%

Free Cash Flow: Free cash flow is defined
as operating cash flow less capital spending. We view free cash flow as
an important measure because it is one factor in determining the amount
of cash available for dividends and discretionary investment. The
reconciliation of free cash flow is provided below (amounts in millions):

Operating

Cash Flow

Capital Spending

Free Cash Flow

Jul 2013 - Mar 2014

$9,452

($2,607)

$6,845

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

(Amounts in Millions Except Per Share Amounts)

Consolidated Earnings Information

Three Months Ended March 31

Nine Months Ended March 31

2014

2013

% CHG

2014

2013

% CHG

NET SALES

$

20,559

$

20,598

0 %

$

64,044

$

63,512

1 %

COST OF PRODUCTS SOLD

10,601

10,344

2 %

32,541

31,574

3 %

GROSS PROFIT

9,958

10,254

(3)%

31,503

31,938

(1)%

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

6,500

6,849

(5)%

19,342

20,090

(4)%

OPERATING INCOME

3,458

3,405

2 %

12,161

11,848

3 %

INTEREST EXPENSE

179

163

10 %

531

504

5 %

INTEREST INCOME

29

21

38 %

73

59

24 %

OTHER NON-OPERATING INCOME, NET

20

25

(20)%

68

929

(93)%

EARNINGS BEFORE INCOME TAXES

3,328

3,288

1 %

11,771

12,332

(5)%

INCOME TAXES

692

697

(1)%

2,606

2,812

(7)%

NET EARNINGS

2,636

2,591

2 %

9,165

9,520

(4)%

LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

27

25

8 %

101

83

22 %

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE

$

2,609

$

2,566

2 %

$

9,064

$

9,437

(4)%

EFFECTIVE TAX RATE

20.8 %

21.2 %

22.1 %

22.8 %

NET EARNINGS PER COMMON SHARE:

BASIC NET EARNINGS PER COMMON SHARE

$

0.94

$

0.92

2 %

$

3.26

$

3.38

(4)%

DILUTED NET EARNINGS PER COMMON SHARE

$

0.90

$

0.88

2 %

$

3.12

$

3.22

(3)%

DIVIDENDS PER COMMON SHARE

$

0.602

$

0.562

7 %

$

1.805

$

1.686

7 %

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,894.1

2,930.7

2,908.9

2,927.6

COMPARISONS AS A % OF NET SALES

Basis PtChg

Basis PtChg

GROSS MARGIN

48.4 %

49.8 %

(140)

49.2 %

50.3 %

(110)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

31.6 %

33.3 %

(170)

30.2 %

31.6 %

(140)

OPERATING MARGIN

16.8 %

16.5 %

30

19.0 %

18.7 %

30

EARNINGS BEFORE INCOME TAXES

16.2 %

16.0 %

20

18.4 %

19.4 %

(100)

NET EARNINGS

12.8 %

12.6 %

20

14.3 %

15.0 %

(70)

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE

12.7 %

12.5 %

20

14.2 %

14.9 %

(70)

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

(Amounts in Millions)

Consolidated Earnings Information

Three Months Ended March 31, 2014

% Change

% Change

% Change

Versus

Earnings Before

Versus

Versus

Net Sales

Year Ago

Income Taxes

Year Ago

Net Earnings

Year Ago

Beauty

$

4,691

-2%

$

800

16%

$

624

17%

Grooming

1,863

-4%

$

613

3%

463

4%

Health Care

2,361

-2%

$

438

-5%

294

-4%

Fabric Care and Home Care

6,340

2%

$

1,030

-3%

658

-3%

Baby, Feminine and Family Care

5,453

-2%

$

1,103

-11%

725

-10%

Corporate

(149)

N/A

$

(656)

N/A

(128)

N/A

Total Company

20,559

0%

3,328

1%

2,636

2%

Three Months Ended March 31, 2014

(Percent Change vs. Year Ago)

Volume with

Volume excluding

Acquisitions &

Acquisitions &

Foreign

Net Sales

Divestitures

Divestitures

Exchange

Price

Mix

Other*

Growth

Beauty

0%

1%

-3%

1%

0%

0%

-2%

Grooming

2%

2%

-5%

3%

-4%

0%

-4%

Health Care

2%

2%

-2%

1%

-3%

0%

-2%

Fabric Care and Home Care

6%

6%

-4%

1%

-1%

0%

2%

Baby, Feminine and Family Care

0%

0%

-4%

2%

0%

0%

-2%

Total Company

3%

3%

-3%

1%

-1%

0%

0%

Nine Months Ended March 31, 2014

% Change

% Change

% Change

Versus

Earnings Before

Versus

Versus

Net Sales

Year Ago

Income Taxes

Year Ago

Net Earnings

Year Ago

Beauty

$

14,878

-2%

$

2,869

7%

$

2,241

8%

Grooming

5,937

-2%

1,944

1%

1,469

3%

Health Care

7,241

1%

1,372

-5%

938

-4%

Fabric Care and Home Care

19,891

2%

3,672

-2%

2,392

-2%

Baby, Feminine and Family Care

16,559

1%

3,366

-6%

2,215

-5%

Corporate

(462)

N/A

(1,452)

N/A

(90)

N/A

Total Company

64,044

1%

11,771

-5%

9,165

-4%

Nine Months Ended March 31, 2014

(Percent Change vs. Year Ago)

Volume with

Volume excluding

Acquisitions &

Acquisitions &

Foreign

Net Sales

Divestitures

Divestitures

Exchange

Price

Mix

Other*

Growth

Beauty

1%

1%

-2%

0%

0%

-1%

-2%

Grooming

1%

1%

-3%

3%

-2%

-1%

-2%

Health Care

2%

2%

-1%

2%

-2%

0%

1%

Fabric Care and Home Care

6%

6%

-3%

0%

-1%

0%

2%

Baby, Feminine and Family Care

3%

3%

-3%

1%

0%

0%

1%

Total Company

4%

3%

-3%

1%

-1%

0%

1%

Sales percentage changes are approximations based on quantitative
formulas that are consistently applied.* Other includes the sales
mix impact from acquisitions/divestitures and rounding impacts necessary
to reconcile volume to net sales.